The operational budget will be C$250 million ($237 million) above or below balance in the fiscal year that started April 1, according to provincial finance department forecasts today. Floods in southern Alberta in June will force the province to spend C$1.2 billion this year on recovery efforts.
Finance Minister Doug Horner predicted on March 7 that Alberta would run an operating decifit of C$451 million amid declining prices for the province’s oil. The outlook for that market has improved, with today’s budget update assuming a price for Western Canada Select of C$80.38 per barrel, compared with the C$68.21 assumption in March.
“Had the floods not happened, we’d be in an operational surplus today,” Horner said during a conference call today from Edmonton. The province spent C$351 million on flood relief in the first six months of the fiscal year, the documents show.
Horner reported a surplus of C$1.1 billion for the first six months of the fiscal year, as higher oil prices boosted revenue. Western Canada Select reached C$91.54 a barrel in July. It traded at C$62.93 a barrel today.
West Texas Intermediate crude will trade at $98.96 a barrel this year, the government forecasts.
The budget update, posted on the department’s website, shows Alberta borrowed C$4.84 billion in the first six months, compared with an earlier forecast of C$3.67 billion.
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